How Do Tax Deductions Work When Donating a Car?
Donating your car to our charity can result in a significant tax savings if you include it in your charitable contribution deduction. It is our intention to keep the car longer for three years and not sell it, which will allow us to use the car's fair market value in reporting your donation back to you.
To determine the car's fair market value, we use a reputable used-car price guide to calculate your deduction, like Kelley Blue Book or over the internet.
You report the amount of your deduction on line 17 of Schedule A, of your itemized deductions. The total of all your eligible expenses on Schedule A must exceed the standard deduction amount for your filing status.
Complete Form 8283 if your car donation deduction is more than $500, between $501 and $5,000, use Section A, greater than $5,000, use Section B. If you complete Section B, you must also obtain a written appraisal as documentation. Most charities will report the sales price of your car to you on Form 1098-C.
Your documentation of your donation will be a letter from our charity including your name, the vehicle identification number, the date of your donation and a statement describing the goods and services you received, if any.